This study is an attempt to investigate the ways in which microfinance programmes, both governmental and non-governmental, have driven financial sustainability and integrated community development among women in Nigeria. In the process the study examined the extent to which programmes have resulted in women's economic, social, and political empowerment. Women are generally considered to be at the lowest rung of the poverty ladder in Nigeria, the study extrapolated the effects of microfinance on the mitigation of poverty. Finally, the study examined the policy implications of microcredit financing of women economic activities within the broad framework of gender stereotypical milieu of these enterprises. In order to accomplish accomplish these goals, I explored the theoretical bases of microfinance analysis with the overarching context of gender/feminist literature. This approach is important because of the low economic status of women in Nigerian society. As I proceed to argue here that there is a general likelihood that the microfinance approach is targeted at women, I also explain the underlying rationale for this approach from the Nigerian perspective. To realize this and test our propositions, I selected three microfinance, one non- organization and two government assisted microfinance organizations: Country Women Association of Nigeria (COWAN), the Peoples Bank of Nigeria, and Family Economic Assistance Programme. The latter two are both federally operated institutions of the government of Nigeria aimed at providing credit to those who ordinarily would not get them and by so doing raise their economic status and help to eliminate poverty. The propositions that are made in this study are (1) there a direct relationship between microcredit availability and economic development; (2) there is a direct relationship between microcrdit and women empowerment in Nigeria; (3) the availability of microcredit facilitates income generating activities among people and contributes to their increased standard of living; (4) that there is an association between microfinancial institutions and the development of financial sustainability among Nigerian women; and (5) that microfinancial institutions are directly associated with women leadership development in Nigeria.

Emerging Theory of Microfinance

Recent developments in African and other developing countries reinforce the contention that microfinance or microcredit structures are essential for development of rural areas in consideration of the fact that areas of development in the these countries have been traditionally urban-centered. As has been argued by the United Nations Capital Development Fund (UNCDF), "the development of microfinance institutions over the last two decades and a number of success stories have lent credence to the idea that microfinance is a major stimulus for development in the countries of the South, and that is a powerful instrument for combating poverty." Adopting rather economistic dimensions, this report suggests two basic assumptions why the development of microfinance has taken such a dramatic and important turn. These assumptions fit in with factor distribution and availability whereby the missing factor of production (from among land, labour, and capital), is supposed to be provided in order to give impetus to development. The first assumption is that "poor populations possess the capacity to implement income generating activities [but] that the main limitation to their initiative is the lack of access to capital." This limitation arises because of two main reasons: financial markets are still in their infancy; and that given their poor track record and lack of collateral, the existing financial institutions are reluctant to extend credit facilities to poor people or their organisations. Another factor is that often, mutual associations and thrift societies that have dealt with financial institutions have been huge failures. In spite of this negative evaluation, the idea persists that poor people given access to capital and guided properly are in a position to implement and manage income generating business enterprises. In other words, poor people too, have the capacity to run economic activities just like the rest of society given a congenial environment. The second assumption is that once the financial systems are established, the poor people "were able to use it (the financial tools) for productive purposes and progressively incorporate themselves into the financial milieu, repaying the loans, and accumulating savings."

It has been reported that at an international conference in 1998, "donors and governments renewed their commitments to advancing women, regenerating environmental resources and providing sustainable livelihood for all." The contention is that microfinace is at the core of each of these three goalls. This is because microfinance provides the means to generate income that eventually leads to a sustainable development. Invariably, microfinance programmes constitute and provide the drive to develop a "broad access" to the financial resources crucial to the poor (among whom women comprise the majority), in order to provide the basic requirements for sustainable development.

Microfinance programmes and institutions have gained widespread acceptance across Africa. Research demonstrates that large scale directed government credit programmes have proved far too costly to manage, as they have always been dogged by poor coordination, inadequate funding, administrative overlap, corruption, general inefficiency and ineptitude. With the help of external funding from bilateral and multilateral organizations most countries in Africa, including Nigeria have adopted microenterpreneurship as an alternative approach to development, in order to avoid these negative tendencies. The intent is to by-pass corrupt public officials, make credit directly available to the very poor and thereby promote their self-sufficiency. The World Bank, United Nationas Dvelopment Programme (UNDP), United States Agency for International Development (USAID), Canadian, Swedish and German governments have all made funds available to microfinance non-governmental organizations in Nigeria with varying levels of success.

Microfinance institutions have rapidly evolved in the last decade and have been able to "create significant income and employment opportunities for the poor in developing countries." The institutions have reached out to many disadvantaged microenterpreneurs and have them to build operational and financial self-sufficiency. In Nigeria's particular case, microfinance programmes founded on sound conceptual footings, and channeled through rural banking have failed because of these limitations. This is in spite of the "over-investment" in this sector by government as was identified by international financial institutions (the World Bank and the International Monetary Fund) and the consequent restructuring of the economy that Nigeria embarked on in the mid-1980s.

Other scholars and policy analysts have identified the inhibiting factors that make rural microfinance enterprises unsuccessful. Yaron identified "high risks" "heavy transaction costs," and "mounting loan losses" as some of the many factors that drained state resources, yet the programmes have reached only a fraction of the target population consequently have failed to provide financial self sustainability. The last decade has also witnessed the evolution of microfinance institutions that created significant and income opportunities for the poor in developing countries. These microfinance programmes have been noted to make great strides towards financial self sufficiency. Successful programmes often cited to buttress these assertions are the Grammen Bank in Bangladesh, BancoSol in Bolivia operated by ACCION, Bank Rakyat Indonesia's (BRI) Unit Desa (village bank) programme in Indonesia. The Grameen Bank is the foremost example of a rural-based microfinance institution. In a recent study, it was reported that the bank has helped to increase significantly household incomes, productivity, labour force participation, and rural wages thereby reducing the level of absolute poverty to a level of 75% lower than in villages without such programmes. After it transformed from a community-based lending institution to a for-profit commercial bank, the BancSol made loans to over 10,000 customers at repayment rates of over 99.5%. In addition to these successful examples, there are African cases such as the Kenya Rural Enterprise Programme (K-Rep), the City Savings in Ghana, The Centennial Bank in Uganda, The Community Bank in South Africa, and the People's Bank in Nigeria. The African microfinance institutions have not been objects of much research. However a recent report has it that K-Rep while not intending to transform to a commercial bank opted to use the banking framework to "fill an important gap that commercial banks have been unable or unwilling to fill in Kenya."

It has been identified that one of the problems that microfinance institutions have faced in Nigeria is that it has always included social welfare projects which divert attention from financial sustainability to welfare issues. Thus microenterprises had limitations in reaching their target populations, "the poorest of the poor." In order to remain relevant and to reach the relevant constituency, a microfinance institution must be able to provide the development activities necessary to generate financial sustainability. Thus the establishment of the Peoples' Bank of Nigeria provides legitimacy and a statutory affirmation of the need to raise the financial sustainability of the rural poor rather than make it donor-dependent. This is because microfinance programmes are said to promote democracy, free markets, and a strong middle class, and essentially complement the bottom-up development in the administrative structure of post structural adjustment economies.

Critics have been quick to point out that the rate of failure of microfinance programmes is an indication that they are not an appropriate policy tool. Some economists however, counter that "[microfinance] is an inappropriate policy intervention, and that it is macroeconomic reform and not microcredit delivery, that it is needed for cultivating entrepreneurship, and developing the private sector in low-income countries." The question however remains as to whether they help in poverty alleviation, especially in regard to women in Nigeria.

Women, Microfinance, and Development in Nigeria

It has been estimated that women comprise nearly 74% of the 19.3 million of the world's poorest people now being served by microfinance institutions. According to the State of the Microcredit Summit Campaign 2001 Report, this equals 14.2 million of the world's poorest women and these have access to financial services through microfinance institutions, banks, NGOs, and traditional or non-bank financial institutions. Also, a survey by the Special Unit on Microfinance of the United Nations Capital Development Fund (SUM/UNCFD) of 29 microfinance institutions revealed that approximately 60% of these institutions' clients were women. Six of the 29 focused entirely on women. Of the other 23 mixed sex programmes, 52% of clients were women. However, the percentage of women clients decreased when "only individual loans" or "relatively high minimum loans amounts" were offered. Similarly, according to the USAID's annual Microenterprise Results Report for 2000, approximately 70% of USAID-supported microfinancial institutions are women.

The Abuja Declaration on Participatory Development: The Role of Women in the 1990s noted that sustainable development only can be achieved with the full participation of women who constitute approximately 50 per cent of the population. And yet, their role in development has only gained serious attention only in the last few years…" The declaration also noted that:

"Women lacked access to resources including credit and technology: Because of the deterioration of the economic situation in the 1980s, the condition of women has been affected adversely… It has constrained governments from allocating the necessary resources to the multiple roles of women and their access to development."

The declaration urged African governments to initiate priority actions that would "substantially increase female extension agents and fully utilize them to establish cooperatives and rural banks for women." While African governments have made some feeble attempts to address the issues raised by this conference, substantial progress has not been made with respect to the general welfare of African women. In the area of microfinance and women's access to credit, most microfinance institutions systematically provide decreasing percentage of loans to women. In most cases it has been found that women have a smaller loan size ostensibly because women are considered to have a lower capital absorptive capacity than men. Consequently, the women's loan packages, programmes, and services are smaller thereby limiting the range of their economic activities and returns. Microfinance strategies have therefore been recognized by national governments, donor agencies, and NGOs as strategies for gender equality, poverty alleviation, community development, and above all for gender equality and women empowerment. It must however be recognized that the setting up of these structures and placing the strategies in the hands of women does not go far in addressing their empowerment and economic welfare in society. These strategies must include training, leadership training and involvement, ownership and control of credit institutions, and identifying the importance of women's economic contribution to the family and to the community and what difference these make to the development of the community and the country.

Recent research (World Bank, 2001) indicates that gender inequalities in developing countries inhibit economic growth. There is a correlation between gender discrimination and greater poverty, slower economic growth, weaker governance, and a lower standard of living of the people. A UNDP analysis similarly confirmed a "very strong correlation between its [UNDP's] gender empowerment measure and gender-related development indices and its Human Development Index." The report also indicates that about 70% of the 1.3 billion people living on less than $1 a day are women. Also, in their investigation on gender implications of irrigation policies in Nigeria, Oramah and Ogbu eloquently argued that "at the center of this inequity issue should be a gender consideration." Women's participation in development in Africa has been rated as low. This low participation has also been blamed for the less than satisfactory impact of public investments in development." Thus there is an apparent feminization of poverty calling for policies and measures through microfinance strategies that specifically address these dire needs of women. Lets now examine some microfinance programmes in Nigeria to determine their impact on women.

Select Microfinance Programmes in Nigeria

Three microfinance programmes in Nigeria for the period, 1985-2000 are examined in this study to provide evidence and test the propositions that microfinace are relevant institutions to the economic advancement of women, the rural poor, and communities in Nigeria. The survey of these programmes also is aimed at highlighting their role in the economic, social, and political empowerment of women during this period. Microfinance policies in Nigeria have been largely uncoordinated. This is partly a consequence of the long period of political instability in the country that literally corresponds to the period under review. However three microfinance institutions selected here are the Country Women Association of Nigeria (COWAN), an NGO; the People's Bank, a Federal government of Nigeria owned commercial-like bank with a rural focus; and the Family Economic Advancement Programme, a microcredit investment and poverty alleviation programmme also set up by the Nigerian government under the Family Support Programme of the General sani Abacha regime (1993-1998). The choice of these programmes results from the fact that they fit in with the microcredit model of microfinance institutions as represented by the Grameen Bank of Bangladesh.

According to this model developed by Pitt and Khandker, microfinance institutions:

lend only to the poor (mostly women),

deal with creditors in groups,

require creditors to deposit savings in the bank

use group peer pressure, arising from social moral force to ensure non-default in loan repayment, and

require good credit standing to secure subsequent loans by the group.

This model certainly draws on the informality of the "isusu" or "oha" financial system that has been described as Rotating Savings and Credit Associations (ROSCAs) where substantial success has been recorded in Nigeria. The isusu ia a common traditional financial system common in rural areas in the southern states of Nigeria. In the remaining part of this paper I will refer to this ATRBS as the isusu model of traditional microcredit to bring it back to its indigenous roots. This is especially so in terms of the low default rate attributable to social pressure from members against defaulting, and even in cases of default, the unconventional ways of recovering loans through sureties. The Grameen Bank model is thus very similar to the isusu model not only that it makes credit available to groups of poor rural persons, including women but also that the repayment mechanism is backed by a solidarity group system that hedges the credits against default through social mores rather than statutory sanctions.

Country Women Association of Nigeria:
The Country Women Association of Nigeria (COWAN) was founded by Mrs. Bisi Ogunleye in 1982 in Nigeria's southwestern Ondo State as an NGO. COWAN fits into the isusu model that has similarities to the Grameen Bank model. The clientele is rural and urban poor women through cooperative rather than individual memberships. As at 1997, the organization had 178,000 members belonging to some 35,000 working cooperative societies a far departure from the six cooperative member organisations at its founding. The primary goal of the organization is to promote "the well-being of women in agricultural, economic decision making for the total development of the capacities of women to contribute to self-reliance and sustainable development." Correspondingly, the specific objectives are to:

Give poor rural women a sense of belonging and the opportunity to benefit from and contribute to the development of Nigeria; and

Give the youth a sound knowledge of the local technology, tradition and culture that are sustainable for economic development.

COWAN has developed a layered management structure that emphasizes grass roots and multiple participation of members. Members earn their participation through the local or village level. This membership allows their primary group to carry them into membership at the highest level of the organization. At the village level, a group is made up of 10-25 members who must be consanguineously or socially related. That is to say they must be related by blood, belong to the same age cohort or age gradehave a business relationship that has made them familiar with one another. The essence of this is to provide the 'tie that binds' so that members come into membership with the same visions and expectations. Moreover, it provides a common platform whereby "needs, strategies, and solutions" of the group are shared. Above the group is the community level, which is made up of five local or village societies. The community coordinates and streamlines the activities of the village societies.

The third layer is the zonal or local government which consists of the societies and communities in between 3-10 local government areas. The area that a zone covers is a reflection of the number of societies and communities in existence, the pattern being that the more the cooperative societies involved in each local government area, the smaller the number of local governments in the zone. Fourthly, there is the state chapter comprising of all society presidents, community facilitators, and zonal coordinators as the management body. The national body is the entire COWAN members. It has an organizational body that comprises the National Coordinator and Matron, a 15-woman board of directors that makes the broad policies. There is also an executive committee on which sits a member from each state chapter. There are other administrative officers who handle the day-to-day affairs of the organization such as national secretary and financial secretary who necessarily are located at headquarters.

COWAN has received generous foreign donor support as well as support from local sources. In addition to these external funds, it raises internal funds through the isusu or African Traditional Responsive Banking system to support the technical and credit need of its members. It is reported that "COWAN pioneered the development of African traditional savings and credit into isusu as a linkage between formal and informal credit system." As in the traditional savings method, members are encouraged to save daily and this is made a condition for membership of the cooperative right from the village level to the state chapter. There are four types of savings services available to members. Educational savings schemes are provided through children whose parents are COWAN members. The aim is to ensure that women have the financial capacity to pay their children's school fees through targeted savings. Secondly, there is healthcare savings for medical emergencies for participating members. These two savings are significant considering that there is no educational financial assistance for students in Nigeria even though school fees are relatively low. Equally relevant is that there are no medical insurance or medicare policies for the people and medical savings is an attempt by citizens to bridge the gap. COWAN thus assists the women to provide for themselves what the government should be doing in the first instance.

Credit facilities are the areas where COWAN plays a critical role in the lives of rural poor women. It provides credit facilities for women involved in agricultural activities to enable them procure simple agricultural implements like hoes, knives, hiring of tractors and purchase of fertilizers. Credit facilities are also extended to people involved in cottages industries, such as oil-palm extraction and palm-kernel cracking and oil presses. In line with its policy of group membership through cooperatives, a credit facility is extended through the group and not directly to the individual. A group is usually made up of not less than five women and their group must have been in existence for three months for them to qualify. Within this period too, they must have been saving as evidence of their commitment to the microenterprise that they are to embark on. Thus, COWAN has a policy that graphically reads: No Savings No membership" and by implication non-qualification for any benefits of the organization.

A primary village group must belong to a Community Center and must have been a member for up to three months to qualify for inclusion in the community's application. A community center is comprised of five local groups that must have saved through the isusu or the village cooperative. A community may join with other Community Centers to invest in a medium community-based enterprise for no more than three Community Centers. There are loans to youths who qualify for membership through the proper procedures. To ensure that loan monies are effectively managed, beneficiaries must attend the Youth Option Life Plan training where they acquire the necessary skills. It is reported that since its founding in 1982, COWAN has disbursed N74 million (seventy four million naira) or roughly $100,000.00 (one hundred thousand dollars). Over 150,000 rural and poor families have benefited from the association's loan scheme.

COWAN uses the isusu or ATRB system of loans which incorporates the social force of society to ensure that persons in the cooperative are faithful to their promise. The repayment rate of the loans at COWAN are quite impressive. This is attributable to the fact that members are made to save with the organisation on a daily basis and have come to regard the organisation as theirs. With a network of groups and Community Centres spread out in 28 of Nigeria's 36 states, COWAN is probably the foremost microfinance institution that has clearly and predominantly addressed its activities, products and services specifically for the upliftment of women. It is involved through several approaches that foster grass roots participation in policies that address poverty alleviation among rural and urban poor women, promotes educational, health and food security of families, and the overall economic advancement of women.

There is need anyway for COWAN to develop a stronger management structure that will stand the test of time and continue to offer leadership in adapting a traditional financial services delivery system to a modern milieu. This will include an expansion of and reorganization of the management structure of the organisation that undoubtedly must include a strategy of succession beyond the founder. This will obviate any future succession struggle that could undermine and waste the organization.

Family Economic Advancement Programme (FEAP):
The Family Economic Advancement Programme was established by the government of the Federal Republic of Nigeria in 1988 in reaction to the increasing level of poverty occasioned by the implementation of the structural adjustment policies imposed by international multilateral and bilateral lending institutions on Nigeria. FEAP is a microcredit scheme which primary goal is to provide investment opportunities that will lead to economic growth. This aims at stimulating appropriate economic activities at the grass roots level and creating avenues for the people to earn higher incomes and thus raise their standard of living. Establishing small and medium scale industries that are based on the available raw materials are considered ways in which this could be accomplished. Such industries will provide managerial skills and economic advantages to the poor in the local areas. Though women were not specifically targeted, it was assumed that by the extension of the FEAP services to the rural areas, women would benefit being very well represented at that level. Some of the more obvious goals of the programme included:

To provide loans directly to people at ward (equivalent to the village or a combination of villages) level with the capital needed to establish small-scale industries or enterprises;

To provide employment opportunities at the lowest (ward) levels of the Nigerian society

To improve the standards of living of the people

To encourage producers at the lower levels to form cooperatives societies through which to promote development consciousness

To involve the private sector, state, and local governments in the funding of the production process; and

To reduce the rural to urban migration that leads to the congestion of the cities and impoverishment of the rural areas.

The FEAP program was created through funds allocation in the 1987 and 1988 federal Nigerian national budgets. Through these budgets, the Nigerian government under the Sani Abacha military regime made a generous allocation of $95 million for the take off of the programme. This intervention was meant to provide microcrdit financial services to individuals and small businesses. These services were to take up 85% of the capital, while 15% was to cover operating costs. Funding of projects was to pass through microfinancial arrangements with selected commercial banks. Like the NGO-sponsored COWAN organization, credit facilities are extended only to the cooperative societies of individuals with common interests and objectives. The cooperative societies must include both men and women as members each of whom will be held individually and severally responsible for the loans extended to the society. And once a loan has been granted, none of the five members of the cooperative society can withdraw from membership as they would still be bound by the loan agreement.

Individual cooperative societies are entitled to a maximum loan amount of N500,000 (five hundred thousand naira), which was adjudged adequate at the time to provide a working capital and funds for machinery, plants and other services. In order to verify the credibility of the applicants, application forms are submitted at the ward level for initial processing and approval. An important requirement required to be met was for the traditional ruler of the area to identify the members and the cooperative society and recommend them favourably to the bank for their projects to be funded. Applicants must also attach the copies of the certificate of cooperative registration as further proof of authenticity. After this initial process, it is then submitted to the participating bank.

A society must pay ten percent of the amount requested, as a good faith deposit to the bank, as a sign of commitment to the proposed project. Though there is no collateral required, this deposit and whatever equipment that are purchased form the only security required in addition to the identification provided through the wards and traditional rulers. The interest rate for the microcredit loans was pegged at 10% with an initial grace period of between three months to one year depending on the type of project, before repayment of the loan commences. All loans must however be fully paid back within three years of their initial lending and the banks have supervisory role over the loans and ensure compliance with the conditions for the facility. An analysis of the funding practices of the FEAP programmes indicates a strong resemblance to the isusu traditional banking system or the ATRBS, which involves and employs social mores to ensure compliance with formal banking rules. This is achieved through involvement of the village traditional leader whose identification, concurrence and support is required for the cooperative to be even recommended to the bank. The fact that group mechanism approach tends to bind people to the aspirations and interests of the group rather than the personalization of the credit facility. It can be argued that the FEAP programme built on the successes of the COWAN programme and with a substantial state generous funding support, it would be expected that FEAP will achieve more successes.

However, this programme does give specific consideration to women. Instead women are left to compete for resources with the men. Given the traditional ways in which women entrepreneurship has been looked at in Nigeria, one might be led to believe that in the final analysis the bulk of the credit facilities would go to men. This particular concern calls for more research. The possibility of this eventuality ever coming to light is now dim in view of the fact that the Sani Abacha regime that instituted the FEAP program was replaced by the Olusegun Obasanjo civilian administration and hence the cessation of operation of the programme.

In spite of the fanfare surrounding its creation and the political legitimacy that it bought the founders during the Abacha military regime in Nigeria, the fortunes of the programme appear to be waning. The coming into place of a democratic dispensation in 1999 has literally halted the huge government subvention that hitherto was given to FEAP. Moreover, most poverty alleviation programmes in Nigeria have always been placed under the non-statutory office of the First Lady. Since coming into office of the Olusegun Obasanjo civilian administration in 1999, his wife the First Lady has set up her own trade mark outfit that has nothing to do with microcredit. The FEAP may die a natural death due policy discontinuity. The immediate organizational threat to FEAP may not be the lack of sound financial management practices but the "political origin and motives" behind its establishment.

The Peoples Bank of Nigeria:
The Peoples Bank of Nigeria (PBN) is the second example of government effort to promote rural financial intermediation with the objective of tackling poverty and promoting rural empowerment. The Federal Government established PBN in 1988. The budget of that year allocated a start-up capital of 30 million naira (equivalent to $1.36 million) to the bank. However, the enabling legislation did not come into effect until 1990 through Decree (now Act) 22 of that year. Government had come to the realization that the increasing pauperization of microentrepreneurs, mostly rural dwellers and women, was lowering the standard of living of the people. Policy makers and commentators also recognized that this group of people lacked the collateral that could secure them the loans that are usually obtained through conventional commercial banks. The enabling law specifically charged the bank to "meet the credit needs of small borrowers who cannot satisfy the stringent collateral requirements normally demanded by conventional banks." It was also set up to "provide small, quick, easy-to-obtain, short-term loans to small businesses without collateral requirement." The bank was to provide microcredit for the under-privileged persons in the Nigerian society to enable them initiate small-scale industries. The PBN like the NGO's is thus expected to facilitate access of the rural poor to microcredit. Initially the bank's branches were restricted to the rural areas but that was to change quickly with pressures from influential members of the political class. Loans granted at this time ranged from 50-5,000 naira but under pressure from big entrepreneurs generals, and politicians, this policy was changed in 1994 and the lending ceilings were abolished. Loans were thereafter considered on a case-by-case basis.

However, the bank grew rapidly as the idea was well received by the citizens. By 1996, the total braches of the bank rose to 275 and had about stabilized there. By 2001, the bank had added only four more branches to stand at 279 branches through-out the country. By 1994, it had 71 mobile banks which extended the bank's service by land and sea to the customer's front door. Its total assets had risen from N1,015 million in 1995 to N1,073 million in 1996. The rate of growth of the PBN had slowed considerably, the initial goal was to have a branch of the bank in each of Nigeria's 774 local government areas. Importantly 75 of the bank's customers are women who receive loans averaging N2000. Though repayment rates were poor initially (30%), that for the women averaged 93% as reported by the first president of the bank. Interest rates for the loans were fixed at 20% when commercial banks charged much higher.

While the PBN did not necessarily adopt the ATRB approach in its management, it used the mutualist and cooperative approach that did not emphasise the savings component. This sets the PBN apart from both the COWAN and FEAP. The management stuyle was therefore a mixture the Anglo-Saxon savings and loans method that took advantage of the mutualist approach through its emphasis on dealing with cooperatives. As has been expressed by a recent study of the bank, the fact that "government ministers sit on the board of the government sponsored but ostensibly independent [Bank] may signal the endorsement of the programs but may also provide a temptation to intervene in the program, perhaps to its detriment." Thus it can be argued that the complete domination of the board of the PBN by government officials through its whole ownership does not bode well for the future of the bank. Even presently there are no solid criteria for the opening and closing of branches but political considerations. Among limitations that the bank has faced in its short history are low repayment rate (about 30%), a lack of sustainability because of a heavy dependence on governmental subsidy and the general impression that government money is nobody's money. The same is not true of NGO and private bank's loans.

Regardless of this, the PBN has been a successful experiment in microcredit intermediation for the rural poor. Over 42,000 clients have saved with, and borrowed from the bank which totals over N565 million (about $5 million). The bank however, needs the restructuring and mainstreaming of its core services and products to address the very basis for its creation. As soon as it becomes less dependent on government subvention as well as develop local management capacity from among its varied clientele, it would be on its way to becoming a great microfinancial institution. It has to be noted though that until 1995, which corresponded with the first management change at the bank it had hitherto experienced a high debt burden as a result of high default rate. The controversial change of leadership in that year led to a re-direction in the bank's operational policies that were aimed at increasing efficiency. By June 1999, the changes had paid off. The bank's liquidity surged to N3000 million and loan repayment previously at 30% bounced to 87%.

Microfinance, Gender, and Empowerment

Women in Nigeria are considered to be the poorest of the poor. The State of Microcredit Summit Campaign 2001 Report defines "poorest" as "the bottom half of those living below their nation's poverty line." According to the World Bank, Nigeria has a national poverty line of 43% in the 1997 survey year. Within the country, 31.7% in urban areas and 49.5% in rural areas lived below the national poverty line. This means that about half of citizens considered "poorest" in Nigeria lived in rural areas. By 2000, Nigeria had plunged from the Human Poverty Index (HPI) ranking of 62 in 1998 to 151 in the world. Nigeria's HPI for 2001 deteriorated to a low 37.6%. This is in conformity with the Microcredit Summit Campaign definition of "poorest". The import of this is that the governments of Nigeria need to do more to deal with the ever-increasing incidence of rural poverty, especially as it affects women. In this regard, microfinance policies are excellent microeconomic tools for effecting the required change. Microfinance program when properly implemented, help not only to reduce poverty but contributes to the empowerment of women. They help place vital resources in the hands of rural women, which otherwise will not be available to them. This helps them increase their economic activities and raise their standard of living in the process. As a former president of the bank notes:

"the People's Bank of Nigeria is the first institutional bank to link loans, credits and financial services with improvements in health status and quality of life. In order to do so, the bank reached out to a wide range of partners including those in the essential sectors of health and education. Information on health status and health practices was included in loan applications, alongside economic information. To be eligible for loans, people had to register in functional literacy and health programmes in rural areas. "

The higher economic status, self-reliance and self-esteem, imbues them with power to make changes and choices about their lives. The choices now made extend to education, housing health-care, and political participation. Thus as a recent on-going study clearly states "in order for a woman to be empowered, she needs access to the material, human, and social resources necessary to make strategic choices in her life." By many women being able to make their own choices they become agents of change who, in turn, are able not only to challenge, but also to organize other women to challenge the social, economic, religious, and political structures of injustice that keep them down.
The empowerment that is provided by financial access creates further synergies that lead to the acquisition of education and literacy, business training and management, and access to information. Poverty and powerlessness are directly associated with these factors. However the environment in Nigeria where women are still expected to perform their social functions sometimes detracts from these achievements. In other words gender stereotypes and expectations remain mired in tradition and will require further action on the part of government and society to break.

Conclusion

The development of sound microcredit or microfinance policies underlie the course of a good approach to solving the incapacitation of the poor in rural and disadvantaged areas of Nigeria to move out of poverty. For this to materilase, the people must develop the capacity to generate and maintain their means of livelihood and produce excess that will eventually lead to savings. Microfinance intermediation aimed at developing the rural poor and women's broad access to financial services provides the most basic conditions for sustainable livelihoods. Also, it must be noted that the gendering of microfinance is far from being the panacea for the immiseration of women and therefore comes short of the brillant approach to development as its proponents are wont to say. This is because microcredit intermediation is far from the being the brilliant predictor development alternative that it is sometimes depicted in development literature, among international donors, and scholars.

As the analysis of the Peoples Bank of Nigeria clearly demonstrates the role of rural and community banks in development can not be overemphasized. These microfinancial institutions mop up and allocate microcredit and thereby facilitate the capacity of the rural poor and women to embark on income yielding economic endeavours. As a recent study of community banks in Nigeria has shown, microenterprises have through loan availability been able to "sustain and …and promote rural development [and] for the first time, communities are realizing that they can advance their own economic fortunes." Community banks unlike the non-traditional banking and financial institutions have great potential for promoting rural development by incorporating the indigenous financial practices such as the African traditional responsive banking system and adopting a learning curve approach. That is to say with constant training, leadership and practice over time, the rural communities will imbibe disciplined banking habits and self reliance. Just like the community banks that were studied by Onugu, the performance of the PBN correspondingly has not measured up to expectation as much of its activities to trading concerns. Credit facilities to agricultural concerns are still limited in spite of that sector being the mainstay of the rural economy.

Three case studies discussed in this study indicate that "proper institutional design and adherence to appropriate policies have the potential to generate substantial achievements in terms of sustainability and greater institutional outreach." Structurally, the COWAN has a stronger management set-up, and save for the position of the founder that could generate a transition problem in future it has been more effective in providing targeted resources to the women. While the government sponsored microcredit financial services have larger funds to render the same services, their structural forms and the political considerations continue to hamper service delivery thus delaying the alleviation of poverty. Thus the direct fiscal intervention in the economy by these government owned bank and agency has been more disappointing and is a resemblance of previous efforts of the 1960s and 70s. The continuing problems of the PBN essentially result from the meddlesomeness of politicians and bureaucrats in its affairs. For instance the stacking of the board of the bank with politicians brings a lot of pressure that deflects from its stated goals.

Also the political instability in Nigeria has continually shaped the capacity of any direct government agency charged with extending credit facilities to women and the rural poor aimed at increasing economic activities and promoting rural economic development. That such an agency is always superintended by the first lade make it subject to the vagaries of the rapid political changes that Nigeria went through between 1983 and 1998. In the case of FEAP therefore, the attachment of this programme to the apron-strings of the first lady weakened this method of credit delivery. Each abrupt change in government also alters the microcredit programmatic arrangement. With the exit of the Abacha regime in 1998, the FEAP began a slow death. By 2001, mid way in the Olusegun Obasanjo administration, his wife and the new first lady had charted a new Programme, thus shunting the FEAP to the sidelines. The government itself under pressure from the civil society set up its own poverty alleviation programme that was not in any way connected to FEAP. If these programmes must succeed, government must create a favourable policy milieu and revamp its regulatory framework that supports in such a way that it supports rural financial markets and support grassroots approach to financial intermediation rather than embark on service provision by itself.